Yesterday I was talking to a content creator about pricing. Well, okay, I was complaining that his prices were a bit too high :P He told me to go take a look at one of his competitor's prices! And it's true, the particular competitor did have a number of more highly-priced items... some items were priced double the value of items in his own store.
But see, you can't compare like that, because although the competitor is in the same business, they might be making different types of items. For example, you could both be making clothing, but you can't quite compare gowns to casual jeans and tees, right?
So it's not just about the pricing. I told him the customer doesn't think that way -- "Y is more expensive than Z" -- especially if the items are not comparable. The customer looks at the item and asks himself, "Is this item value for money?"
Take the ~flirt~ jewellery I bought recently (which I haven't taken off ever since!). The choker/necklace cost 350L. I looked at it and thought, "Mmmm texture change, it is versatile, I can wear it a lot." To me, that is worth it. The same thing with The Body Politik's necklace: texture change, for 300L. Woohoo! (Yes, I bought more jewellery... *looks at my poor SL wallet pityingly*)
Then I went to another jeweller and saw a relatively simple necklace, a more casual item, not so intricate or delicately constructed, with no texture change, and it was 400L. Now if it is elaborate, or has a lot of complex detail, like it looks as if the creator took a lot of work to make it, then 400L would be fair, even without texture change. But because it looked fairly simple and modest (although I know that doesn't mean the creator didn't put just as much work into it), I didn't think the price was worth it. Showing pictures would probably help you to understand better what I'm talking about, but I don't want to give anyone negative publicity for no good reason.
Now I know some people will say that 400L is not a big deal anyway. I meet Americans who tell me it is less than two dollars. Sure, but I'm not American and I don't earn in USD ;) So I never convert inworld prices to RL terms if I can help it.
I'm the same...I will evaluate based on complexity and quality, as well as value for money.
I've seen stuff I liked, but won't buy it because I don't think its worth the money they're asking.
There is not much logic in the SL pricing systems. Everything counts, from effort put in the product and usability to location of the shop. Even the high price is sometimes a reason for a high price. Yes, I know it sounds silly, but that's the way things go in SL.
Most of all, many creators count of pure luck. What else to expect in the economy where selling free stuff for not trivial sums of money is a way to start business?
Pricing is actually one of the most complex areas in both worlds. I can share some experience from the various SL businesses I am involved in:
In Babel Translations, my price structure has not changed for over a year. And even though there are competitors who are cheaper than me, I still have clients who are reluctant to take my services because they are perceived as "too cheap to be quality". Then again, my pricing structure makes only sense when strictly seen inside the SL economy.
At ~flirt~ I was the one who pushed for higher prices. The Tiffany Ring - in many aspects Skinkie's signature piece - was sold for (if I recall it right) 350 L$, and after lots of discussions we set it to 700 L$. Pricing has a psychological component too, especially for clothing and jewellery, and too low a price might get confused as too low a quality. Going shopping has many psychological elements, both when you shop alone or with a partner.
However, in both cases - Babel and ~flirt~ - high quality is being sold. Babel sells individual translations that can not be resold a second time. ~flirt~ sells highest quality jewellery taking Skinkie weeks to create. So charging higher prices for both is ok and the value is immediately visible.
It's a really grey area, but basically I feel that if a piece has taken ages to create, features intricate designwork, great textures and is versatile then I'm prepared to fork out the lindens. Some items that are statement pieces can also be excused for charging a little extra, but it must be terribly confusing to the creator to know what to charge. I've seen some shocking stuff at ridiculous prices...likewise items that could quite easily fetch more dollars and the creators only charge peanuts...
=^..^=
One of the earliest conversations I had with Random Calliope, way way before I started building jewellery myself, he told me how much he regretted some of the pricing policies he'd made previously as his prices had opened the gates for jewellery creators of much lower quality than his to charge extortionate prices for what amounted to... crap (my word not his). At the time I was aware that the cost of his jewellery was less than many others and much higher quality - a different league, but I didn't totally get what he was talking about.
I'm still not in Random's league as far as the quality of my work, but I'm getting there, and when people look to me and say "well she charges L$X for a necklace, so I will" my first thought is "well, you better jolly well make sure it's of similar quality then". If it is, then go for it! If it isn't? Well, the customer will notice and vote with their Lindens.
How does one measure "quality" in jewellery? Perhaps I should write an expose/tutorial type piece in the same vein as Iris Seale's recent article about quality in SL clothing (http://theslrevolution.wordpress.com/2008/11/13/what-not-to-wear/). A clue though - one DOESN'T use bling scripts... even if they ARE multi-coloured ::rollseyes::
This is a really good topic. Pricing, in my opinion, is HARD to do as a designer or content creator. I have no flipping idea what to charge for the things I make, lol. In the case of my artwork when compared to the rest in the gallery I'm a part of, I severely undercharge. I think there are one or two other people who charge $100L for their art. From there, it ranges from about $250L to over $1000L in some cases. I charge so low because I feel almost like I would be arrogant to put myself in the league of those real, professional artists. As far as my vases and other things I want to build go, I am at a complete loss. I charge $100L for my vases because they're using the same artwork but have more function, and took more effort to make. But I wonder if they should actually be less, maybe $75L. I'm still up in the air on that. Now I'm working on those little tea lamp/candles like the rainbow one I sent to you. There is no way a candle is worth that much, although they are even harder to make than the vase. I put one in my store and originally set it to $50L. Then later decided that $50L for a candle was ridiculous, and marked it down to $25L. Trying to put price tags on some of these things feels like taking a stab in the dark. In some cases, I have no point of comparison if I can't find a similar product in SL to price against. In other cases like the art, I feel like it would be pretentious of me to price my work in the range of other artists. Its complicated..
In the case of your post, when you're comparing $400L from one designer to $350L of another, I really don't think its a big enough price jump to be a big deal. Maybe the time and effort involved was enough for them that they felt it should be that much.. I don't know anything about jewellry and can't imagine what must be involved to make it. But a $50-100L increase over a competitor is pretty small compared to some other things I've seen out there. I once saw a 1 prim, single texture rug with no pose balls or scripts attatched that someone was selling for something like $300-$400L! Now THAT is a price hike, lol. And the rug was not even an original design, just a simple image from Google like you see in every other rug store on the grid.
I don't do a lot of shopping for jewelery, although it would be nice to find a watch that did not require I type "bling off" every time I log in. I guess I have a lot to learn before shelling out the lindens.